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ABC manufacturing has the following standards for one of its products:
Direct materials ( 3m at $5 p/m) $15
Direct labor (0.5 hours at $7.50 p/h) $ 3.75during the year, the following actual results were recorded:
Production 7500 units
Direct materials ( 20500m used) $ 86100
Direct labor (3600 hours) $ 25920Compute the following variances:
1—Materials price and usage variances
2—Labor rate and efficiency variancesthank you for assistance.
Please do not simply set test questions and expect an answer.
You must have the answer in the same book in which you found the question. Use this forum to ask what problems you are having understanding the question.
You MUST watch our free lectures on variances because this is a very standard variance question. Our lectures are a complete course for Paper F2 and contains everything you need to pass the exam well.
(I don’t know why you have headed this post ‘accounting inventory’ because it is nothing to do with inventory – it is variance analysis.)
hi sir. in the book there’s no answer to this question.I ‘ve tried to work on it but i can still prove difficulties. reason why I’ve written to get a clear explanation link ed to this question .thanks.I went thru f2.
In that case you should not use this book because you are wasting your time.
You should buy a Revision Kit from one of the ACCA approved publishers.Materials price variance is $16,400 (F)
Materials usage variance is $10,000 (F)
Labour rate variance is $1,080 (F)
Labour efficiency variance is 1,125 (F)If you want the workings then you should watch our free lectures on variances.
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